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Lecture Operations management: Chapter 12 - William J. Stevenson

Chapter 12 - MRP and ERP. In this chapter you will: Describe the conditions under which MRP is most appropriate; describe the inputs, outputs, and nature of MRP processing; explain how requirements in a master production schedule are translated into material requirements for lower-level items;. | MRP and ERP Chapter 12 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. You should be able to: LO 12.1 Describe the conditions under which MRP is most appropriate LO 12.2 Describe the inputs, outputs, and nature of MRP processing LO 12.3 Explain how requirements in a master production schedule are translated into material requirements for lower-level items LO 12.4 Discuss the benefits and requirements of MRP LO 12.5 Describe some of the difficulties users have encountered with MRP LO 12.6 Describe MRP II and its benefits LO 12.7 Explain how an MRP system is useful in capacity requirements planning LO 12.8 Describe ERP, what it provides, and its hidden costs Chapter 12: Learning Objectives Dependent vs Independent Demand LO 12.1 MRP Material requirements planning (MRP): A computer-based information system that translates master schedule requirements for end items into time-phased . | MRP and ERP Chapter 12 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. You should be able to: LO 12.1 Describe the conditions under which MRP is most appropriate LO 12.2 Describe the inputs, outputs, and nature of MRP processing LO 12.3 Explain how requirements in a master production schedule are translated into material requirements for lower-level items LO 12.4 Discuss the benefits and requirements of MRP LO 12.5 Describe some of the difficulties users have encountered with MRP LO 12.6 Describe MRP II and its benefits LO 12.7 Explain how an MRP system is useful in capacity requirements planning LO 12.8 Describe ERP, what it provides, and its hidden costs Chapter 12: Learning Objectives Dependent vs Independent Demand LO 12.1 MRP Material requirements planning (MRP): A computer-based information system that translates master schedule requirements for end items into time-phased requirements for subassemblies, components, and raw materials. The MRP is designed to answer three questions: What is needed? How much is needed? When is it needed? LO 12.2 Overview of MRP LO 12.2 Primary Outputs Planned orders A schedule indicating the amount and timing of future orders Order releases Authorizing the execution of planned orders Changes Revisions of the dates or quantities, or the cancellation of orders MRP Outputs: Primary LO 12.2 MRP: Development The MRP is based on the product structure tree diagram Requirements are determined level by level, beginning with the end item and working down the tree The timing and quantity of each “parent” becomes the basis for determining the timing and quantity of the “children” items directly below it. The “children” items then become the “parent” items for the next level, and so on LO 12.3 Example MRP LO 12.3 Example MRP LO 12.3 Enables managers to easily determine the quantities of each component for a given order size To know when .